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A suit in which victims of terror attacks in Israel received a $655.5 million award
is likely to grab the U.S. Supreme Court’s attention, scholars told Bloomberg BNA.

Terror victims and their relatives are challenging the U.S. Court of Appeals for the
Second Circuit’s decision overturning that judgment against the Palestine Liberation
Organization and Palestinian Authority, in
Sokolow v. Palestine Liberation Org., U.S., No. 16-1071, response due
5/23/17
.

If the court grants review,
Sokolow will join another case involving victims of terrorism in Israel at the high court,
Jesner v. Arab Bank, PLC, U.S., No. 16-499, review granted
4/3/17
. Jesner is expected to be argued in the fall but hasn’t been scheduled for argument.

Both cases will likely affect litigation against businesses outside of the terrorism
context,
Eugene Kontorovich, a professor who teaches international law at Northwestern University law school,
Chicago, told Bloomberg BNA by email.

They each involve whether victims of terrorism can sue in federal court.

Human Rights, Regulatory Effects

Both
Jesner and
Sokolow could have effects beyond terrorism cases, Kontorovich said.

The main relevance of
Jesner “will not be for anti-terrorism litigation,” he said.

Rather, it will be “for human rights litigation against multinational businesses alleged
to be complicit in abuses abroad” under the Alien Tort Statute, he said.

Sokolow will also be most significant for business litigation, he said.

Its subjective test for when a defendant can be brought into court for acts committed
abroad, focused on whether conduct was “expressly aimed” at the U.S., will have a
“potentially broad impact in other extraterritorial regulatory contexts, which are
becoming more common,” he said.

No Personal Jurisdiction

The
Sokolow plaintiffs sued the PLO and Palestinian Authority under the Anti-Terrorism Act for
seven terror attacks in Israel between 2001 and 2004.

The act allows U.S. nationals injured by international terrorism to sue in federal
court and recover treble damages.

Personal jurisdiction is the courts’ ability to exercise judicial power over defendants.

Courts can’t exercise such power if doing so would violate a defendant’s due process
rights under the U.S. Constitution.

“Specific” personal jurisdiction, which allows defendants to be sued in a forum state
if they engage in acts there that give rise to a plaintiff’s claims, wouldn’t satisfy
due process here, the court said.

That type of jurisdiction didn’t apply because the attacks weren’t “expressly aimed”
at the U.S., the court said.

“General” personal jurisdiction, in which a defendant can be sued in a forum state
because its contacts are “so constant and pervasive” that it feels “at home” there,
wouldn’t satisfy due process here either, the Second Circuit said.

Though the defendants had an office in Washington and retained a lobbying firm there,
those contacts were insufficient for general personal jurisdiction, the court said.

ATA Eviscerated?

The PLO and Palestinian Authority aren’t “persons”
and therefore aren’t entitled to due process rights that would prevent them from being
sued in the U.S., the
Sokolow plaintiffs argue in their petition for review.

“The Court is likely to be very interested”
in that argument because the Second Circuit’s ruling “greatly limits, and maybe eviscerates,”
the Anti-Terrorism Act, Kontorovich said.

The “whole point of the act is to allow U.S. nationals to sue for conduct that harmed
U.S. nationals anywhere around the globe,”
Peter S. Margulies, a professor at Roger Williams University law school, Bristol, R.I., told Bloomberg
BNA by telephone.

The Second Circuit’s “narrow view of jurisdiction” in
Sokolow “defeats that goal,” Margulies, who focuses on law and terrorism, said.

“I think the court is likely to grant”
review because “it’s a case that basically eviscerates”
the statute, Margulies said.

Margulies was co-counsel on an amicus brief supporting the plaintiffs in
Jesner, filed on behalf of Sen. Sheldon Whitehouse (D-R.I.).

Uphill
Jesner Battle?

The plaintiffs in
Jesner are asking the U.S. Supreme Court to decide whether corporations can be liable under
the Alien Tort Statute.

The plaintiffs alleged that the bank, which is headquartered in Jordan, financed and
facilitated “the activities of organizations that committed” attacks between 1995
and 2005, the court said.

The ATS gives federal district courts jurisdiction over tort claims brought by an
alien for torts “committed in violation of the law of nations or a treaty of” the
U.S.

But the statute prohibits corporate liability, the court said.

The Supreme Court’s prior ATS rulings suggest that it’s unlikely to give the law a
“broad scope,”
and the
Jesner plaintiffs therefore “have an uphill battle,” Kontorovich said.

However, the wording of the question presented in
Jesner—whether the ATS “categorically forecloses corporate liability”—wasn’t modified by
the court’s order granting review.

That “suggests the Court may be open to carving out some special circumstances for
corporate liability under the ATS,” Kontorovich said.

The Second Circuit acknowledged that the Supreme Court suggested “that the ATS may
allow for corporate liability,”
in
Kiobel v. Royal Dutch Petroleum Co., also known as “
Kiobel II.”

The Second Circuit also noted that there was “a growing consensus among our sister
circuits to that effect,”
but said it was bound by circuit precedent set in
Kiobel v. Royal Dutch Petroleum Co., also known as “
Kiobel I.”

The en banc court declined to rehear
Kiobel I by a 10-3 vote.

In doing so, the court missed an opportunity to correct “an opinion which is almost
certainly incorrect but continues to maintain a needless circuit split with
every other circuit to address” corporate liability under the ATS, Judge Rosemary S. Pooler
wrote in dissent, joined by Judges Denny Chin and Susan L. Carney.

Will
Jesner Affect
Sokolow?

Margulies said a ruling for the plaintiffs in
Jesner could help the
Sokolow plaintiffs.

The court “could affirm Congress’s very strongly stated policy providing a remedy
for victims of terrorism,”
he said.

That “would be an additional basis”
in
Sokolow for the court to defer “to Congress’s view that actions against terrorist groups
or unrecognized governments were vital to deterring international terrorism,”
he said.

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